Apple – Unbearable Agony Ahead?

In slightly over seven months, Apple shareholders have lost a mind boggling $283.78 billion.

I doubt there’s been anything like it in the history of stock markets.

Apple’s share price, which peaked at $702.10 on September 19, 2012, closed at $398.67 on Monday, April 22, 2013.

Apple’s market capitalization (total shares multiplied by share price) has collapsed from a stratospheric high of $658.15 billion in September 2012 to a more earthly $374.37 billion on April 22.

In other words, a tumble of over 43%.

What about Tomorrow?

Tomorrow could pile on more bad news for Apple shareholders when the company announces its fiscal second quarter results.

Several analysts are pessimistic about Apple’s second quarter results.

Apple’s large suppliers like LG (supplier of panels) and Hon Hai Precision Industry Co. (maker of iPhones) have already posted unimpressive results.

A Bloomberg poll of analysts predicts Apple’s fiscal second quarter profits will decline 18% to $9.53 billion ($10.02 a share).

The same analysts expect Apple’s revenues to grow at the slowest pace since 2009 – a rise of 8% to $42.4 billion.

Slowdown in iPhone sales, severe competition from cheaper Android devices, absence of a messianic leader like Steve Jobs and lack of a compelling new product are contributing to the significant loss of Apple’s sheen. will not be surprised to see Apple’s shares sliding to $300 in the not too distant future.

Apple shareholders must gird up for excruciating pain in the coming months.

6 Responses to "Apple – Unbearable Agony Ahead?"

  1. vedagiris   April 22, 2013 at 10:51 pm

    iExpensive Apple has survived mainly because of exceptional looks of its products and superb closed ecosystem.

    Apple hasn’t made any great innovations in both hardware and software.

    And it is mainly supported in US. Outside US, Chinese are already fed up with their iExpensive Phones and Indians bought their product only after heavy slashing of prices.

    Apple might remain market leader in Mobile Industry in upcoming years, but its Profits will (should) continue to dwindle in forthcoming years.

    After all, we(I) don’t want monopoly of Premium phones by a large corporation. Responds:

    The only thing that might lift Apple out of its current doldrums is the rumored low-cost iPhone for developing nations (India, Africa etc).

    On the ‘coming’ iWatch’s success too, I remain skeptical!

    The watch, I think, is a gadget whose time has passed! I see few people sporting a watch in the U.S.

  2. Madmax673   April 23, 2013 at 11:41 am

    HTC One already seems to be getting better reviews than iPhone 5.

    Just remembered your quote from Dell’s downfall: “Today’s success is no guarantee of tomorrow’s profits nor today’s failure a predictor of tomorrow’s losses”.

    Just didn’t expect it this fast.

    Unfortunately I have to use Vijay’s punch line here: “Vaalkai oru vattam da…inga jeyikkaravan thoppan, thokkaravan jeyippan”. Don’t remember which movie it was. Responds:

    HTC One looks impressive, very impressive, going by your review link. Camera is not all that great, likely because it’s just 4-megapixel.

    But the reviews to watch out for – Samsung Galaxy S4. Shipping Wednesday (T-Mobile) and Thursday (AT&T).

    Together, HTC One and Galaxy S4 will make life difficult for iPhone 5 and Apple’s stock!

  3. MadAtBollywood   April 23, 2013 at 11:59 am

    I am looking for a short term play purely based on technicals. Apple is oversold and undervalued at this point with a P/E of around 9.04 and a forward P/E of around 8.16. Stock price will try to touch near its 20-day and 50-day moving average between $424 – $437 in about a couple of weeks from now.

    That would be between 5% – 8% profit. Of course all this is assuming that the stock doesn’t get bombarded tomorrow because of its earnings release after market close today.

    How low can apple stock go from these levels? I would be amazed to see it around $300. But then again, I would definitely add a huge chunk of apple in my portfolio if it falls to $300 😉 Responds:

    1. You write: Stock price will try to touch near its 20-day and 50-day moving average between $424 – $437 in about a couple of weeks from now.

    Hope, they say, lies eternal in the human breast! 😉

    2. Also, Apple is one of those uncommon stocks whose valuation rests less on technicals compared to a lot many other stocks!

    • MadAtBollywood   April 29, 2013 at 11:47 am

      There ya go, my price target between 424 – 437 has been achieved. Apple is around $428 today. Time to open up that scotch whiskey 😉 Responds:

      Probably because of the hype about the tremendous response to Apple’s Developer Conference and the not-so-great reviews for Samsung Galaxy S4.

      My instinct tells me the momentum can’t last.

  4. kage_11   April 24, 2013 at 11:40 pm

    You wanted to wait for Samsung Galaxy S4 review, here it is –

    Go for HTC One. Responds:

    Sweetie, I read your link first thing this morning (i.e. yesterday morning)!

    Here are some facts on HTC One!

    * Camera is not good in HTC One! See your site Verge gives HTC One only “6” points for HTC’s camera –

    While I agree that an obsession with Megapixels is overdone I also don’t like this 4-megapixels nonsense in HTC One. Hell, I got a 5-Megapixel Sony 10-years back (still going strong, and better than my Nikon 10MP DSLR & Canon 8MP point and shoot).

    * Also, HTC One is using a slightly older version of Android 4.2.1, the one with bugs.

    After using iPhone for 5-years, and mostly no-issues with iOS I’m reluctant to pay $2,000 over a 2-year-period (U.S. carriers have 2-year contracts) for a phone with bugs.

    So I’m inclined to wait a bit. I will confess though that I was tempted enough to call my local AT&T store this morning…they said they’d have the Galaxy S4 phones on April 27 or 29 (can’t remember now).

    Also, some of the vaunted features in Galaxy S4 like scrolling by looking at the device do NOT work. Source: WSJ & Bloomberg

    I will concede that the HTC One is a lot sexier than the plastic garbage Samsung Galaxy S4 (Kinda like comparing that Tamil trashy, slutty starlet (you know who) with my inamorata, the class-oozing, nonpareil Jennifer Lawrence!) 😉

    Maybe, I’ll wait for the Next Generation iPhone, after all!

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